The pandemic has slowed demand for apartment buildings in the District as some renters shift to suburban areas, and developers with downtown projects are increasingly competing with each other for tenants.
As the competition intensifies, developers are having to focus more on improving their amenities and service offerings for residents who are spending more time at home. One of the most important offerings they are focusing on today, two developers said on a Bisnow webinar Tuesday, is WiFi connectivity.
Apartment absorption in the District for the 12 months ending Sept. 30 was down 33% from the prior year, according to new data from Delta Associates. The District's vacancy rate rose 440 basis points in Q3 to 7.8%, according to Delta Associates, and apartment rents were down 10.7% year-over-year.
Foulger-Pratt Director of Development Judd Ullom, speaking on Bisnow's Tech Connectivity and the Future of Multifamily webinar, said he has seen demand soften in the District as people look for apartments with more space in suburban areas.
"Parts of Downtown D.C. are getting a little bit more competitive," Ullom said. "In the downtown locations, it just makes the amenities a product has all the more critical, especially with connectivity, because it's the No. 1 currency right now."
Generation Development Group Managing Principal Marvin Wilmoth said the quality of a building's WiFi connectivity has become a much more important factor during the pandemic.
"A number of things we used to do in different places, whether it's education, work, entertainment or any number of activities are all now concentrated in our home," Wilmoth said. "So connectivity ends up being not just a nice-to-have, but an absolute requirement for residents in multifamily across the nation."
As apartment developers are working to improve their WiFi service for residents, they are discovering that it is just as important to have a strong connection in the common areas as it is in the units.
Ullum said residents who have been working from home are looking to spend more time in the common areas, and the most in-demand spaces are the private office nooks. He was sitting in one of those nooks in Foulger-Pratt's newly delivered Beckert's Park apartment building on Capitol Hill during the webinar.
"We have a combination of open, flexible work areas and a couple of office nooks, those are going to be in high demand if somebody needs to work in their building, but they don't have space to do it in their unit," Ullum said.
One of the ways to ensure those residents can continue to have a strong internet connection when they shift to common areas is with Managed WiFi. Boingo Wireless Vice President of Operations Melissa Morales, whose company provides Managed WiFi, said it allows residents to move from their private apartments to the common areas without losing internet connection.
"Managed WiFi is a network that is going to provide connectivity throughout the property, whether the resident is in their living room, in a common area, a coworking area, it is really an end-to-end network throughout the property," she said. "It really creates that instant-on, available network across the property that residents are demanding nowadays."
This type of WiFi has long been commonplace in student housing, but traditional multifamily developers have only begun to use it in the last two to three years, Ullum said.
"It's not anything new, it's just relatively new for multifamily development," Ullum said of Managed WiFi. "And it makes complete sense. It's a lot easier to manage, and ultimately we want the best product for our tenants."
In addition to a strong WiFi connection, the developers said the pandemic has increased the importance of many other apartment building offerings.
Ullum said Foulger-Pratt is also looking at smart home technologies, including automated thermostats and motorized shades that can adjust depending on the time of day. Another big focus for apartment owners, Ollum said, is finding efficient and safe ways to control guest access to buildings.
Wilmoth said his company is focusing on offerings such as automated thermostats, smart locks and touchless elevators. One main factor in considering these offerings, Wilmoth said, is whether they can reduce utility costs and give the building a competitive advantage.
"We're really focusing on technologies that will reduce resident expenses," Wilmoth said. "As we move forward, we understand that it's one thing to have great WiFi connectivity, it's also another point of differentiation to say, 'By coming to this development, you'll be able to reduce your costs because we have lower utility costs because we have smarter technology.'"